PHILADELPHIA -- The drug maker Wyeth (NYSE: WYE) is inching closer to resolving lawsuits brought by people who suffered heart damage from taking the fen-phen diet drug combination in the 1990s.
Wyeth and a group of lawyers representing thousands of people with claims against the company jointly asked a judge Tuesday to halt litigation while they negotiate with other law firms about a proposed settlement.
The deal would involve about 60,000 people who opted not to participate or were not eligible to participate in a 1999 class-action settlement that covered a majority of people who took the drug combination.
Wyeth confirmed it was involved in settlement discussions and said its decision whether or not to accept the proposal would depend partly on how many plaintiffs choose to participate. The lawyers backing the settlement represent about 11,000 people.
"This is a promising development, but many complex issues remain to be resolved," the company's general counsel, Lawrence V. Stein, said. "Wyeth will continue to defend itself in the ongoing litigation until final settlements are reached."
Wyeth shares rose more than 5 percent on the news of the potential deal.
Meanwhile, a federal judge in Philadelphia held a hearing Tuesday that could pave the way for final approval of a revised version of the 1999 settlement that covered most fen-phen takers.
The original agreement, which has already lead to payments to thousands of people, proved to be problematic, partly because many more people filed claims than Wyeth or the lead plaintiffs had anticipated. The trust overseeing the settlement has accused several law firms of filing bogus claims on behalf of people who may have suffered no harm from the drugs.
A new mechanism for identifying ill people and determining how much they should be compensated received tentative approval over the summer. A judge will use Tuesday's hearing to help decide whether the arrangement is fair.
Both sets of cases against Wyeth allege heart damage from the diet drugs Redux and Pondimin, which were one-half of the fenfluramine and phentermine combination. The drug maker, based in Madison, N.J., withdrew them from the market in 1997.
Wyeth previously had previously set aside $16.6 billion to cover its diet-drug legal costs and liabilities from settlements and cases decided at trial. About $3.1 billion of that total remains.
On the Net:
National Settlement Trust: http://www.settlementdietdrugs.com